Thursday, 4 October 2012

Torex - Morelos Gold Project BFS and raise $350m

Torex (TXG.TO) have demonstrated that there is an appetite for investment in junior gold developers with a fund raising for $350m to progress mine development for production by the end of 2015, hitting 375k oz pa production by 2017. This follows on from their recent Bankable Feasibility Study (BFS)

Hitting $2bn NPV at $2000 gold there is limited leverage to the current $800m market cap.

However this is seen as a safe project, relatively low capex and high margin due to the 5m oz deposit being relatively high grade.....

This was 15th in BMO's list of 76 potential gold mines

Torex Fundraising

The company released a bankable feasibility study (BFS) in September

Highlights of the BFS (base case using $1,276 / oz LOM average gold price)
Commercial Production DeclarationOctober 1, 2015
First Year of Full Production2017
Proven and Probable Mineral Reserves48.8 mt @ 2.61g/t
LOM Strip Ratio (Waste:Ore)5.6:1
Mill gold head grade2.61 g/t
Mill gold recovery87.4%
Mill silver head grade4.35 g/t
Mill silver recovery32.7%
Mine Life excluding production tail10.5 years
Annual Production 2015128 koz Au
Annual Production 2016246 koz Au
Average Annual Production 2017 to 2024375 koz Au
Peak annual production494 koz Au
Cash Costs net of Ag revenue excluding production tailUS $421/oz
Capex up to commercial production (without revenue credits)US $675 M
Capex up to commercial production (including revenue credits)US $552 M
Capex after commercial productionUS $86 M

Project Economics
 US$ 1276 / oz(1)
Base Case(2)
US$ 1500 / ozUS$ 1750 / ozUS$ 2000 / oz
Cumulative Cash Flow   (US$M)$1,558$2,121$2,747$3,374
After Tax NPV @ 5% (US$ M)$900$1,262$1,679$2,096
After Tax IRR (%)24.2%28.9%34.6%39.8%
Capex Payback (Years)
2017 EBITDA (US$ M)(3)$276$336$417$497
(1) Average gold price LOM
(2) Base case assumed metal prices in US$:
Gold: 2015 - $1,500/oz, 2016 - $1,407/oz, 2017 - $1,315/oz, 2018 and beyond - $1,250/oz
Silver: 2015 - $27.75/oz, 2016 - $25.00/oz, 2017 - $25.00/oz, 2018 and beyond - $22.00/oz
(3) First year of commercial production

An additional resource statement

Torex's stock  held up well for the past year, ~ $800m market cap

No comments:

Post a Comment